Life is all about ups and downs – when financial setbacks happen, nothing but bankruptcy becomes the only way to move forward. But as usual life moves on and almost every one of us requires a car.
But how would you think about buying a car with bad credit car loans when bankrupted? Well, knowledge is everything. You need to know that it completely depends on the bankruptcy type that you are filling. Generally, you will find two different and most common types of the personal bankruptcy which are chapter 7 and chapter 13.
So what is in these two chapters? Let us dig out a little bit more.
Chapter 13 defines that the debtor who has a good and constant income has the permission to hold their property which they might lose due to the bankruptcy procedure. The entire procedure consists of creating a plan to pay the creditors part or all of debt in the course of 3 – 5 years. In this process, debtor needs to get permission directly from court to apply for a new debt like the car loan that you need.
If the request is being granted by the law, you can proceed with the process for finding a suitable loan along with the lender who will accept the application especially from the people who are going through such process.
Chapter 7 is a lot different from chapter 13. This is chapter, the non-exempt assets of the debtor are being sold while the proceeds are provided to the creditors. The entire procedure takes almost 4 months or 120 days starting from filing till debts get erased thereby closing of the case. This process requires you to be patient prior to attempting the loan till you are provided with the notification that the bankruptcy has been discharged.
Loan Shopping and Improving Your Credit:
There is no doubt that you might be provided the permission to get a car loan even when bankrupted, but it is always recommended to take time for improving your credit before you apply. You should always know that positive credit history is a plus point, as it is the only factor that determines whether you can qualify for any loan application along with the interest rates.
Make sure you constantly check the reports in order to understand where exactly you are standing. You can find the inaccuracies which are actually affecting the score along with the best terms. Also correct them if you can or take time to rectify them.
When you have done all of these, you can stay assured that you can get approval. When approved, you can obtain better interest rate. While these are some of the information that you can definitely have a look at, you should definitely never fail to check the credit score.
Bad Credit Auto Loans is a very common scenario and definitely needs much attention. Having said the options, make sure you find the ideal way out to get a car loan.